NSE Shares Cannot Trade On Its Own Platform For Now, SEBI Chief Says No Panel Considering Self-Trading

Shares of the National Stock Exchange (NSE) cannot currently be traded on its own platform, with Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey saying on Wednesday that no panel is considering a move to allow stock exchanges to self-trade their shares.

Pandey's comments come days after NSE Chairman Srinivas Injeti said the exchange's self-listing was within the realm of feasibility and that the regulator could reconsider the existing framework. NSE shares started trading on the BSE last week after the exchange completed its long-awaited listing.

The issue has gained attention because NSE is now a listed company but its shares cannot be traded on the platform it operates under the current rules.

NSE Self-Trading Rules And SEBI's Latest Stand

Speaking on Wednesday, Pandey said SEBI is not considering self-listing at present and that there is no panel looking into the matter. The regulator had also said earlier this month that NSE had not submitted any formal request seeking permission to trade its shares on its own platform.

Under the existing framework, an exchange cannot list or trade its own shares on its platform. NSE's shares are currently listed on BSE, following its market debut last week. The shares are also being traded on the Metropolitan Stock Exchange under the permitted-to-trade category.

The question of self-listing came back into focus after NSE Chairman Srinivas Injeti said on September 25 that self-listing was feasible and that the decision ultimately rested with the market regulator.

Injeti had also acknowledged the conflict-of-interest issue involved in an exchange listing and trading its own shares. An exchange that self-lists would have to deal with its own listing compliance and surveillance while also operating the market on which its shares are traded.

Why NSE Self-Listing Is In Focus

NSE's listing has brought the question of self-listing into sharper focus because the exchange is now a publicly traded company while continuing to perform market-regulation and surveillance functions.

NSE Chairman Injeti had said that the exchange's primary responsibility would remain maintaining market integrity and protecting investors, even where that could come at the expense of business interests. He had also said that any conflict between the exchange's regulatory role and its commercial interests would have to be managed.

Self-listing is permitted in several major overseas markets, although India's framework has historically taken a different approach because of potential conflicts of interest. NSE's chairman has argued that the regulatory framework could evolve as the Indian capital market develops.

For now, however, SEBI's position remains unchanged: there is no panel considering self-trading in exchange shares, and NSE cannot trade its own shares on its platform under the current framework. Any change would require the regulator to revisit the existing rules.

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